Avoiding Aspirational Spending

Photo: Alex1961

When it comes to staying on a path of righteously frugal living, my own personal Kryptonite is clothing. I'm not one for spending on dining out, and I don't indulge in luxuries like a big screen TV, but my head is easily turned by a cute pair of shoes or colorful top. That's not a huge vice, I guess. I mean public nudity IS frowned upon, so clothing is a necessity. Where it becomes very detrimental to personal finance, however, is when my wardrobe budget is spent on items for life I'd like to be leading instead of the life I actually live. (See also: Where to Buy Discounted Designer Clothing Online)

Fashion blogger Robin of High Heel in a Haystack summed it up perfectly when she said, "Buy clothes that you will wear on a Tuesday afternoon, not a Saturday night. Very few people lead Saturday night lives."

This is very fitting (excuse the pun) advice for making sure clothing purchases turn out to be money well spent. Yes, that tux might make you look better than Clooney on the red carpet, but how often do you get an invitation to a movie premiere? And those sexy stilettos might be the absolute perfect touch for doing the tango in the moonlight on the deck of the Queen Elizabeth, but is your lifestyle more daycare drop-offs than cruise ship dancing?

It's not just clothing that's relevant for the "Tuesday afternoon" benchmark; all financial outlays should be held to this standard. You've heard of "lifestyle inflation," where your standard of living expands to meet (and sometimes exceed) your increasing income level? Well, "aspirational spending" is a similar phenomenon where purchases that one makes are out of sync with one's actual way of life.

For example, you might picture yourself as a rugged individualist. An outdoorsy, camping, get-close-to-nature type. For that reason you own a four-wheel drive, off-road vehicle — which, 99% of the time, is used to transport you to and from work on paved highways. On a smaller scale, perhaps you're like my brother who had a job that kept him traveling about 75% of the time. Despite that, he shelled out about $150 each month of premium cable channels that he was never around to watch. Or like me, with an unlimited talk, text, and data smartphone plan even through my Android device is used primarily as an MP3 player.

Aspirational spending could come in the form of a purchasing a home with a pool for that one holiday weekend a year when you actually get it together to have a backyard barbecue party with all your friends. Or that fancy health club membership that you signed up for as a New Year's resolution but haven't used since January 15th. Or a top-of-the-line Viking gas range bought to tap into your inner Jacques Pepin when you're more of a microwave/take-out kind of person.

One way to avoid aspirational spending is to make mindful cost/benefit assessments before committing to the expense:

  • How often will you use the item?
  • Are you paying for features you don't need or want or use?
  • Is there a less expensive comparable option?
  • Are you buying to service a current need or a future desire?
  • Does the item fit into the life you live or some "dream" lifestyle?
  • Can you live without it?

When you actually take time to assess whether or not what you're spending money on adds value to the life you live rather than acting as a psychological placeholder for the life you think you SHOULD be living, you may find that there's an awful lot of spending on dresses for parties you'll never go to, sports equipment when your main form of exercise is clicking the remote, or that souped-up smartphone that doesn't mesh with your technical IQ.

It can be humbling — and maybe even a little depressing — to acknowledge that you don't actually NEED a Cannondale Supersix EVO Ultimate sports bike because you'll never compete in a triathlon, much less the Tour de France, but it's also freeing in the long run.

By making sure your purchases reflect your actual day-to-day habits rather than some dream lifestyle you don't actually live, you can funnel the money that would have been wasted on out-of-sync spending into savings, which can help you to attain financial freedom. And once you do that — who knows? Maybe you'll then have the wherewithal to actually pursue that Saturday night life after all!

This is a guest post by Stella Louise, editor of the Savings.com Blog & Save, a lifestyle blog for savvy consumers.

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Guest's picture

Hubby & I have been watching our next door neighbors put in a large in-ground pool in their back yard here in Ohio this summer. We think this is a prime example of aspirational spending. They have 3 kids, but the oldest just left for college. We wonder how much use the pool will really see during the summer (May-August). Besides the cost of the pool chemicals, there is the cost of running the filter. We wonder if they also considered the cost of hosting impromptu parties for their friends who drop by on hot days to take a swim.
They don't own a pool...the pool owns them.

Guest's picture
Rebecca B. A. R.

I live in Ohio, too, and when you say it that way about an underground pool, it makes me feel better about thinking about getting a little kiddie plastic pool for the dog and me! It shouldn't take too much out of my dog's college fund either!

Guest's picture

I'm looking to cut my cable bill since I'm never home to watch TV anyway. At $110 a month, it sure isn't cheap.

Guest's picture
Brent Janzen

I cut my cable last summer. My wife and I thought it would be harder then said, but we're really enjoying it! It opens your mind up to other activities we can do together rather then sitting blankly into a screen.

Guest's picture

I've been guilty of aspirational spending throughout my whole life and maybe part of the American dream but that dream is becoming less attainable with the economic downturn. This article serves as a nice reality check b/c we're all guilty of it sometimes which can be ok but when times are tough then it can put you in a real bind like for millions right now (including me).

Also, related matter is that we Americans need to remember is to NOT live on credit. Credit and living beyond our means is what's got us into this Great Recession mess.

Guest's picture

Just moved into my first house! The article hits on many points that I'm thinking about right now... Do I buy that natural gas bbq or king bed? ARG! Do we get a new couch or just reupholster the existing one? Spend $500 on the front garden?

Love the cost/benefit checklist, I need to do that for sure!

Guest's picture

I often have battles with myself over aspirational spending. Currently one half of me is trying to talk the other half of me into an iPhone that I know I don't really need. So far the frugal side has won, but the battle isn't over yet!

Guest's picture

This is great advice! I actually use it all the time, but then I already know I'm never going to look like a supermodel if I purchase so-and-so brand outfits. I'm a much bigger fan of finding what looks good for ME and then shopping around for bargains. I don't care about the label - I just want to look smashing. ;)

Guest's picture

great advice! I'm an impulsive buyer and these questions don't even come to mind when I'm thinking of making a purchase (big or small). I've started to notice how much I spend on going out, shopping, etc and I def fit into the "aspirational spending" category. Thanks for the tips, will have to definitely weigh out the benefits/cons next time I get that itch to spend!

Guest's picture

I suppose buying clothes in anticipation of the weight you assume you're going to lose also counts as aspirational spending? :(

Guest's picture

I think we could all be aspirational spenders for one thing or another. I bought this really cool cleaning gadget because it looked really cool, but I only used it 3 times. But I guess when you buy something you should definitely ask yourself if this is a day to day necessity, if not you may want to rethink your purchase. I think all of us can say that there are a couple things stored away in our closets that we never used.

Guest's picture

I love this post. We need to hear more of this. I try to be practical in my spending. One thing I try to ask myself when I make purchases is "is it functional?" I'm all about smart spending but often times it's difficult since we live in a society that is so concerned with consuming stuff.

Guest's picture

I think the "Tuesday afternoon/ Saturday night" advice is really smart. I constantly buy "going out" clothes that I never wear because they're too uncomfortable!

Guest's picture

i just looked to my left to see that new handbag....argh! i want to spend smart so i can splurge without guilt!

i have a related questions -- i live in an expensive suburb. what are general opinions on how much of your income you should spend on rent? unfortunately all the places by me are so expensive....

Guest's picture

Many landlords will have their own ratio for rent/income. It's often advised to spend no more than 30-40% of your income--but, if spending a bit more cuts expenses in other areas (transportation for example), it might be worth the additional cost.

Guest's picture

Great advice! Just want to mention that it does sometimes pay to dress really, really well for work (without spending a fortune). I'll never forget the day I was in the elevator with some coworkers, one of whom glanced down, then gasped: "Aren't those $400 shoes?!" I just smiled and never mentioned that I'd gotten them on ebay for just a few dollars. Sweet!

Guest's picture
Cooper Guyan

Pretty sound advice. I definitely fall into the buy what you really need, not what you think you need camp. Shopping for single events or nights out is always a bad spending idea.

Guest's picture

I think the most dangerous thing about spending is that we have been programmed to love it. It actually makes me feel good to spend money - when I am doing it, but then afterwards I tend to regret it. It's key to take a deep breath and remember that feeling of buyer's remorse. The next time you have it let it sink in so that when you are feeling that shopper's high you can just fight back. In the end you'll be a lot happier.

Guest's picture

Those "unlimited data" smartphone plans aren't that great anyway. There's usually a data cap in the small print, meaning they'll downgrade you to a slower network if you go over some arbitrary threshold.

It's best to find out how much data you use, then buy the cheapest plan to satisfy that number.

Guest's picture
Rebecca B. A. R.

I have been really bad about aspirational spending on craft supplies for doing projects. I know that I follow through on some crafts much better than others, and even though I want to learn how to do new things, I'm just not very motivated. I'm much better about not buying anything that is not specifically needed for a something that I am currently working on for a project.

Guest's picture

This is a very well written and timely article. I will share another idea that has worked very well for me and my clients for years. When considering one of these type of purchases, figure out how many hours you will have to work to earn that item. If you have an hourly job earning $25 per hour, and that $100 pair of jeans will take four hours to earn, depending on how much you enjoy your job, you may decide four hours isn't worth the trade.

Guest's picture

This is great advice! And it applies to so much more than clothes: technology, subscriptions, club memberships... and on and on. We spend money on things we wish we used, but we really don't need them at all. Helpful post!


Guest's picture

I love this post! I'm horrible about viewing my wardrobe in terms of what I'm missing (usually party clothes) instead of what I actually need. Sure, it's nice to buy something for a night out every now and then, but I don't need a whole closet full of shiny clubwear. No matter how much I tell myself I do. :)